Asian Markets Mark Strong Month

By

Daniel Inman

Updated Jan. 31, 2013 3:56 a.m. ET

Asian markets generally declined Thursday, marking a downbeat end to a very strong January.

Two large markets that came back to life in the final quarter of 2012, Japan and mainland China, posted substantial gains in January. The Nikkei rose 7.2%, its sixth consecutive monthly gain, as sustained yen weakness continued to support local stocks, while the Shanghai Composite added 5.1% to reach its highest close in eight months as Chinese economic data continued to point toward a recovery in Asia's largest economy.

In addition, Australia's S&P ASX 200 climbed 4.9% over the month to 4878.80, even as the day's 0.4% loss snapped a 10-session winning streak.

"The pledge to stabilize things in Japan and the U.S. continuing with quantitative easing [is] more than enough for our market here to do very well," said Stan Shamu, market strategist at IG Markets in Melbourne, adding that a pickup in iron-ore prices also helped local miners.

The growth story for markets in Southeast Asia remained compelling, and combined with strong sentiment, led stocks on these smaller exchanges to post the mnth's biggest gains.

Earnings weren't all positive, however, as videogame company Nintendo skidded 5.1% in Tokyo after posting weak third-quarter results and cutting its outlook.

More broadly, some of the biggest economic cues came from the U.S., where advance fourth-quarter gross-domestic-product figures released Wednesday provided the main surprise. Gross domestic product for the world's largest economy declined by 0.1% in the fourth quarter, falling short of expectations for a 1.0% increase.

Also in the U.S., the Federal Reserve concluded its most recent policy meeting, keeping rates unchanged and reaffirming its commitment to open-ended bond purchases.

In Asia, data showed Japan's industrial output rose 2.5% on-month in December, below expectations for a 4.0% rise. However, the data was strong enough for the government to raise its assessment, saying that output is showing signs of coming out of last fall's declines.

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